[Federal Register Volume 62, Number 37 (Tuesday, February 25, 1997)]
[Notices]
[Pages 8477-8478]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4610]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38291; File No. SR-NASD-97-10]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by National Association of Securities Dealers, Inc. Relating to
the Distribution of Information Concerning the Availability of the NASD
Regulation, Inc. Public Disclosure Program
February 14, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on February
11, 1997, the National Association of Securities Dealers, Inc.
(``NASD'' or ``Association'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the NASD. The Commission is publishing this notice to
[[Page 8478]]
solicit comments on the proposed rule change from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Below is the text of the proposed rule change. Proposed new
language is italicized.
2280. Investor Education and Protection
(a) Each member shall, with a frequency of not less than once every
calendar year, provide in writing to each customer the following items
of information.
(1) NASD Regulation Public Disclosure Program Hotline Number
(2) NASD Regulation Web Site Address
(3) A statement as to the availability to the customer of an investor
brochure that includes information describing the Public Disclosure
Program
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the commission, the NASD included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The NASD has prepared summaries, set forth in Sections
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
During 1995, at the request of the Honorable Edward J. Markey, the
General Accounting Office (``GAO'') undertook a review of the
effectiveness of the NASD's toll-free telephone information service
used to disseminate information under the NASD Regulation Public
Disclosure Program (``PDP''). In July 1996, the General Accounting
Office issued a report of its review of the PDP. The report included a
recommendation that NASD Regulation publicize and educate investors
about the availability of information through the NASD Regulation PDP.
Specifically, the report recommended that NASD Regulation:
[E]xplore other ways of publicizing the hotline to a wider audience
of investors, such as including the hotline number on account-opening
documents or account statements, making disciplinary-related
information directly available to investors through the Internet.
The Proposed amendment in new paragraph 2280(a) would require each
member to provide to each customer, at least once annually on a written
statement, the 800 telephone number for the PDP, the NASD Regulation
Web Site Address, and the availability of an investor brochure that
includes information describing the PDP. This proposal gives NASD
members the flexibility to determine what kind of written statement is
to be used. Some members may elect to include this information on
customer account statements and some may elect to use another kind of
publication.
The NASD believes that the proposed rule change is consistent with
the provision of Sections 15A(b)(6) and 15A(i) of the Act in that the
requirement that firms publish on a written statement to existing
customer accounts, as least annually, the availability of information
through the PDP is an important element in promoting the availability
of the PDP information to investors.
B. Self-Regulatory Organization's Statement on Burden on Competition
The NASD does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participant, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
At any time within 60 days of the filing of a rule change pursuant
to Section 19(b)(3)(A) of the Act, the Commission may summarily
abrogate the rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
A. by order approve such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning SR-NASD-97-10. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, DC 20549.
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Room. Copies of such filing will also be
available for inspection and copying at the principal office of the
NASD. All submissions should refer to the file number in the caption
above and should be submitted by March 18, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-4610 Filed 2-24-97; 8:45 am]
BILLING CODE 8010-01-M
